Can GBPUSD Correct Higher?

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The British pound fell sharply during this past week especially against the US dollar. It cleared an important support area around the 1.4950 level which ignited a sharp downside reaction in the short term. The GBPUSD pair even traded below the 1.4800 level, which is a bearish sign. In the UK, the Rightmove House Price Index was released which provides a sample of residential property prices in the UK. The outcome was a bit lower when compared to the last time. So, there is nothing for now for buyers to take it higher. Later during the NY session, the US industrial production report will be released, which can cause some moves in the near term.

There is a critical bearish trend line formed on the hourly chart of the GBPUSD pair, which is waiting on the upside to act as a resistance if the pair moves higher. The pair looks like forming a short-term base around the 1.4700 support area. So, there is a chance of a correction towards the 1.4850-1.4900 levels. Initial hurdle is around the 23.6% fib retracement level of the last leg from the 1.5254 high to 1.4698 low. The most important one is around the highlighted trend line which is sitting near term the 38.2% fib level. The hourly RSI is moving up from the extreme oversold readings, which is a positive sign for now.

GBPUSD 03.16.2015

If the GBPUSD pair moves lower from the current levels, then the last low of 1.4700 level might come into play again.

Overall, one might consider selling rallies in the GBPUSD pair as long as it stays below the highlighted trend line.

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